38. The latest list has no obvious defects. Explicit
reference to human rights has been restored.[54]
The reference to international obligations and commitments, present
in the first three lists, has disappeared from the list in paragraph
3 of the Schedule, but is contained instead in paragraph 2.[55]
Paragraphs 1 and 2 of the Schedule allow controls for the purpose
of giving effect to any Community provision on export of goods
or transfer of technology, any obligation under the CFSP or "any
other international obligation of the United Kingdom". The
paper states that non-binding international commitments "are
reflected through all the purposes".[56]

39. The list is no doubt capable of further
refinement. The UKWGA referred to the EU Code's Criterion Three,[57]
" the internal situation in the country of final destination,
as a function of the existence of tensions or armed conflicts".
This may not be fully covered by the reference at B of paragraph
3 of the Schedule to " an adverse effect on peace, security
or stability in any region of the world". We recommend
that consideration be given to a specific reference within the
Schedule to internal conflicts within the country of destination.

PROPOSED PURPOSES OF STRATEGIC EXPORT
CONTROLS

Scott Report

Green Paper

White Paper

Draft Bill

(i) complying with international treaty obligations

(a) to adhere to the UK's international obligations and commitments, including international arms embargoes

To adhere to the UK's international obligations and commitments, including international arms embargoes and international control regimes

Para 2 of Schedule

(b) to prevent the proliferation of weapons of mass destruction and of missiles and unmanned air vehicles capable of delivering weapons of mass destruction

To prevent the proliferation of weapons of mass destruction and of missiles and unmanned air vehicles capable of delivering such weapons

C. Use of the goods or technology anywhere in the world in connection with the development, production or use of weapons of mass destruction

(ii) protection of our armed forces

(c) to ensure the security of the UK, its dependencies and its armed forces abroad, and of allied countries

To safeguard the UK's security interests and those of allies and EU partners

A. An adverse effect on the national security of the United Kingdom (or any United Kingdom dependency), any Member state or any other friendly State.

D. Use of the goods or technology anywhere in the world to carry out or facilitate the carrying out of(a) acts threatening international peace and security(b) acts contravening the international law of armed conflict(c) internal repression in any country(d) breaches of human rights

(d) to avoid contributing to internal repression and instability within the country of destination of the licensed goods

To avoid contributing to internal repression

(e) to take into account the economic and technical capability of the recipient country, and to achieve the least diversion for armaments of human and economic resources

To avoid seriously undermining the economy of the recipient country

F. A serious adverse effect on (a) the economy of any country; or(b) the potential for sustainable economic development in any country

(vi) avoidance of assistance to aggression by foreign countries

(g) to avoid contributing to the prolongation or aggravation of existing armed conflicts between states

To avoid contributing to international aggression

B. An adverse effect on peace, security or stability in any region of the world

(h) to preserve international and regional stability

To avoid damaging regional stability

(v) avoidance of assistance to serious crime in foreign countries

(i) to avoid contributing to terrorism and serious crime

To avoid contributing to terrorism and crime

E. Use of the goods or technology anywhere in the world to carry out or to facilitate the carrying out of acts of terrorism or serious crime anywhere in the world

40. The UKWGA also referred in evidence to the risk
of diversion. [58]
This had appeared in the 1996 Green Paper. It is hard to see how
export controls could be imposed on goods or technology of any
description because of the risks of their being diverted elsewhere.
If goods would be dangerous to any destination, then they would
presumably be caught under the terms of the existing Schedule.
UKWGA also raised the phrasing of the "sustainable development"
paragraph. They suggested that some of the detailed language of
Criterion Eight of the EU Code should be added to the text of
the Schedule, including the need to balance legitimate defence
needs against sustainable development.[59]
However, this issue seems to arise more from the process of licensing
in individual cases than in the definition of purposes for which
controls can be imposed"

41. The list of purposes does not address the issue
raised by the Scott Report: should export controls on goods or
technology already subject to control be used as a general weapon
of foreign policy? We have raised in past Reports the question
as to how far it is possible or desirable to use the export licensing
system as a tool of foreign policy, as a means of conveying disapproval
of a regime or of specific acts. The legislation could allow for
that, either by adding to the list of undesirable consequences
"an adverse effect on the national interests of the United
Kingdom", or by providing expressly that controls may be
imposed and exercised in pursuance of the foreign policy interests
of the United Kingdom. The questions raised in the Scott Report
on the propriety of using export controls as a tool of foreign
policy, or in pursuit of national commercial advantage, may relate
not so much to the goods to be subject to control, as to decisions
on whether to grant a licence.

42. There are several other areas where we question
whether a purpose might not be added. The fact that there are
no powers at present used to control the export of agricultural
goods does not mean that they might not be used in future, as
a means of avoiding a threat to public health in third
countries. Ministers might wish to control the export of goods
for reasons of their potential for environmental damage,
outside any international regime. They might also wish to control
the export of goods on ethical grounds, outside the powers
of Customs and Excise to control pornography or degrading material.
There are no doubt other possible grounds which can be debated
in a Committee on the Bill. There is evident advantage in having
such a debate now, rather than having to wait for a subsequent
amending Order, which will not be open to amendment. We recommend
that Ministers consider the addition of further purposes for which
exports may be controlled, including the avoidance of damage to
health or the environment.Where they judge it inappropriate
to add such powers, they should set out the existing control powers
relied upon to fulfil such purposes.

46. The House of Lords Committee expressed its concern
over Clause 3(2), finding it not "right in principle and
therefore appropriate to delegate a power to impose controls for
purposes which are not set out in this Bill...The Committee does
not at present consider that a restriction on the freedom to trade
should be granted in such wide terms".[64]
Lord Scott had no objection to it.[65]
Ms Baxendale was concerned that it might be used in an undesirable
way to bring in controls for general foreign policy reasons.[66]The Secretary of State told us that it
was there for "things that we do not foresee".[67]

47. Having set out the primary purposes for which
export controls may be imposed and having provided for adding
to those purposes by secondary legislation, it is in principle
undesirable to bolt on another procedure for imposing controls
which are not within any statutory purpose. It is not clear to
us why powers are needed to add purposes permanently and temporarily,
both subject to the same parliamentary procedure. We recognise
the dilemma which a Government potentially faces if it finds that
there is political pressure to impose controls for reasons which
fall outside the purposes defined, and which are of a temporary
and political nature. The requirement to pass primary legislation
could be a powerful disincentive to action, even if there were
broad support for the proposed controls, and the time delay involved
in passing such legislation could well render any action nugatory.
However, the 40 day period of grace allowed before such an Order
lapses unless parliamentary approval is given (which could extend
to several months if the clock-stopping provisions of Clause 11(3)
had effect) seems to us too generous. We recommend that the
period of time during which Orders made under Clause 3(2) may
remain in effect without parliamentary approval should be 28 calendar
days.

49. These lists are almost entirely the result
of various multilateral agreements on what goods should be controlled.
For example, we noted in our February 2001 Report the progress
made in establishing a common EU Military List. The Dual-Use List
is an EU list, now laid down in EU rather than national Regulations.
There have in the recent past been some instances of unilateral
extension of controls to new categories of good, most recently
in relation to instruments of torture. The result of the new proposed
Schedule is that an extension of controls to goods or technologies
hitherto not requiring licensing could only be done where the
Secretary of State judged that there was a risk that their export
or transfer might have any of the undesirable consequences listed
in the Schedule. The draft Bill therefore seems to constrain
the freedom of Ministers to decide what goods or technologies
may be subject to controls; but in practice Ministers are already
constrained by the nature of existing multilateral regimes.

50. The imposition of export controls is in practice
exercised not only through secondary legislation on the definition
of goods and technology requiring a licence, but through the actual
process of granting or refusing particular licences for particular
destinations in particular circumstances. The draft Bill is
silent on the licensing process. There are no statutory criteria
for licensing decisions, nor any requirement that licensing decisions
should follow any guidelines. Cm 5091 states that "the effect
of the provisions in the Bill will be that any licensing decision
which ignores completely the purposes set out in the Bill is likely
to be an improper use of the powers provided in the Bill...the
purposes will set definite parameters for legitimate Government
action...".[70]
It records the suggestion made by some that the national criteria
or the EU Code -now in effect mergedshould in some way
be incorporated in the legislation. The Government considers that
this " would simply introduce rigidity" into the consideration
of applications, and "would be as likely to require the Government
to grant a licence in a borderline case, as to prevent it from
granting such a licence". The paper concludes by repeating
the phrase that "the purposes will set definite parameters
for legitimate Government action".[71]
The Secretary of State confirmed in oral evidence his understanding
that licensing decisions would have to be within the purposes
set out in the Schedule.[72]
The UKWGA seemed happy with the assurance that licences would
conform to the purposes as set out.[73]
It has however sought and continues to seek the incorporation
into statute in some way of the EU criteria, so that the licensing
process would have to conform to some statutory norms.[74]

51. The Schedule at present sets out parameters for
the making of control Orders under the Bill, but does not provide
explicitly for such parameters on decisions on licences. A positive
duty could be laid on Ministers in making decisions on
licences to have regard to the need to avoid the undesirable consequences
listed in the Schedule. Conversely, a Minister would not be able
to refuse a licence unless there appeared to him to be a risk
of one of the undesirable consequences listed. We recommend
that consideration be given to putting on the face of the Bill
the assurances given in the explanatory paragraphs accompanying
the draft Bill and in evidence to us, that licensing decisions
should have due regard to the general purposes for which controls
can be imposed, as set out in the Schedule to the Bill.

53. The Secretary of State told us that the Government
did not intend to change the provisions in relation to Crown immunity,
but that it would adopt the principles it itself had laid down
in relation to Government dealings.[79]
The transparent reporting of Government transfers offers some
reassurance that Governments will indeed abide by the principles
governing non-governmental arms transfers. There might, however,
be some advantage in binding future Governments to have regard
to the purposes for which export controls are applied when considering
their own transfers. We recommend that consideration be given
to the desirability of ending the blanket exemption from controls
of Government and its agencies as exporters of licensable goods
and technology.